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This Week in Washington - July 1, 2016

On June 30, the Senate Finance Committee released a 19-page white paper examining potential reforms to the Stark Law. The white paper follows a discussion held in December 2015 by Republican majority members of Senate Finance and House Ways and Means committees in which Hall Render shareholder Gregg Wallander participated in a small roundtable of outside Stark Law experts. The white paper highlights the complexity of the Stark Law, the costs associated with compliance and the severity of its penalties. Regarding penalties for technical violations, the white paper specifically notes that roundtable participants believe the Stark Administrative Simplification Act is a step in the right direction. That legislation, which was sponsored by Rep. Charles Boustany (R-LA) and Rep. Ron Kind (D-WI), would limit the penalties for technical violations of the Stark Law and was introduced as a result of the efforts of the Stark Law Correction Coalition, which was created by Hall Render in 2013. The white paper also discusses stakeholder perspectives on the difficulties many are experiencing in attempting to comply with the law’s strict liability standard while implementing the Medicare Access & CHIP Reauthorization Act of 2015 and other alternative payment reforms. The Senate Finance Committee is tentatively scheduled to hold a hearing on Stark Law reform the week of July 11.

CMS Releases Proposed Payment Rule for Home Health Services

On June 27, CMS issued a proposed rule that would reduce Medicare payments to home health providers by one percent and cut overall home health payments by $180 million in 2017. Under the proposal, home health agencies would be paid a standardized 60-day episode payment for all covered services, such as skilled nursing, home health aides, speech-language pathology, social services, medical supplies and occupational and physical therapy. The agency is required by the Affordable Care Act to adjust the standardized payment rate to account for factors including the number of visits in an episode of care, the type and intensity of services provided in an episode and the average cost of care per episode.

The proposed rule also outlined a mandatory value-based purchasing pilot program for eligible home health agencies participating in Medicare in Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee and Washington. Beginning in 2018, CMS would apply a three percent annual payment increase or reduction to agencies providing home health care in the nine states depending on whether they meet certain performance metrics. The payment adjustment for home health agencies would increase to eight percent in 2022.

HHS Releases Proposed Rule for Medicare Appeals Process

On June 28, the Department of Health and Human Services (“HHS”) introduced a series of proposed changes to the Medicare appeals process intended to decrease the backlog of pending appeals. According to HHS, the Office of Medicare Hearings and Appeals had more than 750,000 backlogged cases as of April 2016.

In its proposed rule, HHS designates some decisions from the Medicare Appeals Council as precedent that lower-level decision-makers would be required to follow in order to resolve inconsistent interpretations of Medicare policies and remove redundant appeals. HHS would also allow senior attorneys to be responsible for some procedural matters that are currently handled by administrative law judges and would eliminate other steps in the appeals system to simplify the process. HHS believes the proposals would eliminate the backlog of pending cases by 2021 and reduce the number of cases that go to the third level of appeals. HHS will accept comments on its proposals through August 29.

On June 28, the Senate Finance Committee held a hearing to examine the CMS proposed demonstration for Medicare Part B drugs. The demonstration would change the way that Medicare pays for medications and care in outpatient facilities under Part B.

At the hearing, Finance Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) underscored the need for CMS to protect Medicare beneficiaries and health care providers in rural areas in its proposed rule. Committee Democrats said the agency’s model could negatively impact seniors’ access to treatments and physician-administered drugs. Republican members have asked CMS to withdraw the proposal completely. Dr. Patrick Conway, CMS’s Acting Principal Deputy Administrator, told Senate Finance Committee members the agency is using the panel’s comments to determine if any adjustments should be made before the demonstration is finalized.

Health-Related Bills Introduced This Week

Sen. Bill Cassidy (R-LA) introduced legislation (S. 3101) to limit the liability of health care professionals who volunteer to provide services in response to federally declared disasters. The Good Samaritan Health Professionals Act would provide clinicians with legal protections while volunteering during disasters.

The House returns on July 5 when it will vote on the mental health reform bill (H.R. 2646). The Senate returns July 6 for an abbreviated work week. Also on July 6, the House and Senate Opioid Conference Committee will meet and attempt to iron out a final legislative package.

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